Thursday 20 March 2014 15.30 President Obama has announced further sanctions against prominent Russians and cleared the way for possible sanctions on key sectors of the Russian economy in response to Moscow's seizure of the Crimea region.
The US President also said Russia's threats to southern and eastern Ukraine posed a serious risk of escalation of the crisis.
"Russia must know that further escalation will only isolate it further from the international community," Mr Obama said at the White House.
He added that diplomatic efforts were continuing and "Russia still has a different path.
"Mr Putin needs to understand the Ukrainians should not have to choose between the west and Russia," he said.
Earlier German Chancellor Angela Merkel said EU leaders will signal their readiness to ramp up punitive measures against Russia, including economic sanctions, at a summit in Brussels today.
"The EU summit today and tomorrow will make clear that we are ready at any time to introduce phase three measures if there is a worsening of the situation," Ms Merkel said.
She added that the Group of Eight format, which includes Russia, was effectively dead so long as the diplomatic showdown with Moscow continued.
Russia has the presidency of the G8 and had been scheduled to hold a summit in Sochi in June.
Taoiseach Enda Kenny will travel to Brussels for the summit, which will be dominated by the continuing crisis in East-West relations, following Russia's invasion and annexation of the Ukrainian region of Crimea.
European heads of government are also expected to look at ways to reduce Ukraine's and Europe's dependency on Russian oil and gas.
The summit is taking place against the backdrop of deep unease among European governments that Russian President Vladimir Putin has single handedly and, with brutal speed, up-ended the post war architecture of Europe.
Moscow says the annexation of Crimea is historically just and has threatened to retaliate against sanctions.
Europe and the US have struggled to keep pace with events, and to calibrate a response that is commensurate, but that will not escalate tensions.
Germany has approved plans for EU leaders to sign parts of the association agreement with the new pro-Western government in Kiev.
However, EU leaders will have to decide whether or not to simply expand the list of Russian and Crimean officials who are now subject to visa bans and asset freezes, or to move up to more severe economic and trade sanctions against Russia.
British Prime Minister David Cameron has proposed that Russia be expelled from the G8 and is expected to table a number of measures to make Europe less dependent on Russian energy.
The proposals will include the use of imported shale gas from the US.
The rhetoric between east and west has sunk to a level not seen since the cold war.
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